OPEC+, a group of 23 oil-producing countries, have come to an agreement to make major cuts in crude exports in light of falling global demand in fuel as a result of the COVID-19 pandemic.

The deal will see oil production being cut by 9.7 million barrels per day (bpd) in May and June, representing the largest cut every agreed to by oil producers.

It amounts to almost 10 per cent of global supply and lower reductions will be made from July 2020 to April 2022 with the aim of stabilising global crude markets.

“We took the responsive and responsible action to focus on adjusting crude oil production by 10 mb/d beginning on 1 May 2020, for an initial period of two months; then by eight mb/d from July to December 2020; and by six mb/d for the period of January 2021 to April 2022, in the interests of producers, consumers, and the global economy,” OPEC Secretary General,” Mohammad Sanusi Barkindo, has stated.

“This was forthcoming in the statement from the G20 meeting with a commitment to work together ‘in the spirit of solidarity’. It also recognised the commitment of the producers in the OPEC+ group to stabilise energy markets and acknowledged the importance of international cooperation in ensuring the resilience of energy systems. Now we need to ensure as a group that we deliver on these expectations. We need to iron out any marginal differences to reach a consensus decision. We need to get this deal over the line.”

Since the evolvement of COVID-19 to a pandemic, oil prices have been falling as production began to far outweigh demand.

The cuts made are twice the amount made by OPEC countries during the 2008 global financial crisis.

Countries which backed the deal include the United States, United Arab Emirates, Kuwait, Mexico, Saudi Arabia and Russia and more.

Initially, Mexico would not sign the deal and later only agreed to cut its output by 100,000 barrels per day but talks with US President, Donald Trump, saw the country agreeing to make bigger cuts.

“The big Oil Deal with Opec Plus is done,” Trump said a subsequent tweet. “This will save hundreds of thousands of energy jobs in the United States.”

Meanwhile, Barkindo has maintained that the challenges of the unparalleled COVID-19 pandemic need comprehensive and ‘global’ solutions.

He has stressed that the consequences of not finding a solution and unanimity are extraordinary.